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How are CC&Rs defined?

A Declaration of Covenants, Conditions, and Restrictions is also referred to as CC&Rs or as a Declaration. It is a recorded document that includes the legal description of property and a statement that it is a community apartment project, condominium project, planned development, or stock cooperative. The CC&Rs must also set forth the name of the association and the restrictions on the use or enjoyment of the property. Unlike bylaws, which address the governance of the association, CC&Rs describe the property rights and obligations of the members, such as (1) restrictions on the use of property, (2) member and association maintenance obligations, (3) enforcement powers, (4) lender protection provisions, (5) assessment obligations and lien/collection rights, (6) the duty to insure, and (7) dispute resolution and attorney fees provisions.

Covenants are promises to comply with the governing documents and pay assessments. The buyer does not sign an agreement making a promise to the company with the documents; the promise is imposed on the buyer as an equitable servitude that runs with the property and is fully enforceable against the owner of the property. A positive covenant is a promise to do something, while a restrictive covenant is a promise not to do something.

Conditions in governing documents, contracts or agreements can suspend, rescind, or modify an obligation. An event must take place before a party must perform their obligation. There are very few if any real conditions in CC&Rs.

Restrictions are limitations imposed on owners on the use of their property. For example, restrictive covenants often limit the number and kinds of animals an owner may keep, the alterations they can make to their property or the number of vehicles they can park. The purpose of restrictions is to maintain property values as well as order among neighbors. They also have the effect of conferring rights on owners. For example, restrictions on the height of trees protect views for owners.

 

Who is the Declarant?

The Declarant is the person or entity that creates the original governing documents for an association. The Declarant is generally the developer of the development and usually reserves certain rights and powers to himself related to the sale of units in the project including extra voting rights. The Davis-Stirling Act defines the Declarant as follows: "Declarant" Means the person or group of persons designated in the declaration as declarant, or if no declarant is designated, the person or group of persons who sign the original declaration or who succeed to special rights, preferences, or privileges designated in the declaration as belonging to the signator of the original declaration. Most associations will restate their CC&Rs to eliminate all references to the Declarant, eliminate all legalese, and add important provisions found in the Davis - Stirling Act.

 

Can a condominium be a detached home?

Yes. While condominiums are usually attached, they can also be detached, freestanding homes. A condominium is a form of ownership and a type of common interest development. It often surprises homeowners to learn that their detached home is a condominium and that they do not own an individual lot. When someone owns a detached condominium, all of the homes are usually located on one or a few lots and what appears to be an individual lot is actually an area over which a unit owner has an exclusive or non-exclusive easement. The only way to determine the type of ownership is to read an association's CC&Rs and condominium plan or tract map.

 

What are the governing documents of a homeowner association?

The governing documents include the CC&Rs, Condominium Plan, Bylaws, Articles of Incorporation, and Operating Rules.

 

We are unable to locate the Condominium Plan for our homeowner association. What can we do?

The Condominium Plan is a very important component of your association's governing documents because it is often the only means of accurately determining the dimensions of the common area and individual units. Also, sometimes mortgage lenders and insurance companies ask to review this important document. There are two places to search for an association's Condominium Plan: (1) Run a title search to obtain a copy from the County Recorder's Office, or (2) Check with the California Department of Real Estate (DRE). Condo Plans are required to be recorded and filed with the DRE.

 

Who creates the initial CC&Rs for a homeowner association?

The initial CC&Rs are created by the developer of the property. An attorney will draft the document which must include the requirements of the California Department of Real Estate (DRE) in addition to anything the developer wants to include that is not prohibited by law. After the CC&Rs are approved by the DRE and recorded, any restatements and/or amendments must be approved by the membership.

 

What laws are involved in the regulation of common interest developments in California?

The laws are: (1) the Subdivision Map Act. This is part of the California Government Code, (2) the Davis-Stirling Common Interest Development Act. This is a section of the California Civil Code, (3) the California Corporations Code, and (4) the California Code of Regulations. These laws do not include case law.

 

What do you need to restate our association's CC&Rs?

In addition to a signed fee agreement and the initial payment, we will need the following: (1) The current CC&Rs and any amendments, (2) The current Bylaws and any amendments, (3) The current Articles of Incorporation and any amendments, (4) The Condominium Plan, assuming the development is a condominium, (5) A recorded grant deed for any unit or lot, (6) A title insurance policy for any unit or lot, and (7) Any Master CC&Rs, if applicable.

If you cannot locate the condominium plan (if applicable), we can order it from the County Recorder's Office at the expense of the association as long as we have one exemplar of a recorded grant deed and one exemplar of a title policy.

 

What is the difference between Restated CC&Rs and Amended CC&Rs?

Restated CC&Rs refer to a complete replacement of your existing CC&Rs. Amended CC&Rs refer to selective modifications to your existing CC&Rs. CC&Rs that were recorded more than six years ago, generally need to be restated.

 

Is it important for the law firm restating or amending CC&Rs to have someone on their team with HOA management experience?

 

Absolutely. CC&Rs must be practical and designed to eliminate conflicts between individuals and homeowners and homeowners and the association. The Davis-Stirling Act is invaluable in that it provides us with most, but not all of the law. However, it does very little to provide guidance on how to minimize or eliminate management problems that arise regularly within homeowner associations.

 

What is the additional fee if we want someone from your firm to be available by Zoom to answer questions about the proposed CC&Rs and explain changes that have been made?

Since we consider this service to be very critical to the approval process, we will spend whatever time is reasonably required for a fixed fee of $250. The fee applies per session.

 

What is a condominium plan and what does it include?

A condominium plan shall contain all of the following: 1) A description or survey map of the condominium project, which shall refer to or show monumentation on the ground; 2) A three-dimensional description of the condominium project, one or more dimensions of which may extend for an indefinite distance upwards or downwards, in sufficient detail to identify the common area and each separate interest; and 3) A certificate consenting to the recordation of the condominium plan that is signed and acknowledged.

 

Can your firm help us establish effective operating rules?

Absolutely. We have an extensive library of attorney-approved operating rules that can be made available to your homeowner association and can also create customized rules. See: Operating Rules Available for Associations.

 

What is the Hierarchy of Document Authority?

Following is the hierarchy:

1. Law (unless the particular statute defers to the governing documents.
2. CC&Rs.
3. Articles of Incorporation.
4. Bylaws.
5. Operating Rules.

• To the extent of any conflict between the governing documents and the law, the law shall prevail
• To the extent of any conflict between the articles of incorporation and the declaration, the declaration shall prevail
• To the extent of any conflict between the bylaws and the articles of incorporation or declaration, the articles of incorporation or declaration shall prevail.
• To the extent of any conflict between the operating rules and the bylaws, articles of incorporation, or declaration, the bylaws, articles of incorporation, or declaration shall prevail.

Conflicts between provisions in the same document can usually be settled by applying general rules of interpretation.

 

Are CC&Rs easily challenged if they are unreasonable?

No. California courts have consistently ruled that CC&Rs are presumed to be reasonable. Only if they are discriminatory can they be overturned as to the provision. Operating Rules of an association do not carry such a presumption and can be challenged. The court has discretion to determine whether they are reasonable.

 

Why do some older CC&Rs require a percentage of the secured first deed of trust lenders to approve certain amendments to CC&Rs?

Some attorneys have included such language without any input from any of the secured lenders because they thought it would be wise to do so. Historically, when secured lenders have been contacted for the purpose of seeking approval to restate or amend CC&Rs, 99% of more of the time they don't respond. Most of the time, the only amendments that require approval are: (1) eliminating or reducing insurance requirements for owners, (2) permitting the dissolution of the association, (3) eliminating maintenance obligations, and (4) reducing penalties for violations. When an association wishes to restate its CC&Rs, it should be careful not to make changes that will lessen the rights of secured lenders.

 

You probably work with lots of HOA management companies. Can you give our HOA board some advice on interviewing them?

Yes, See: Questions to Ask an HOA Management Company Before You Hire Them.

 

Our association in Studio City has recently adopted an amendment to our CC&Rs that requires purchasers of homes in our community to put at least 25% down. The intention is to discourage buyers who cannot afford to pay our association's assessments. We are tired of dealing with delinquency problems. Is this amendment enforceable?

Probably not. Courts will not enforce unreasonable restraints on alienation (the sale or leasing of property). A 25% down payment requirement will probably be considered unreasonable because most lenders do not require such large down payments or equity positions.

 

We were about to make an offer to purchase a condominium in Los Angeles when we learned that the board's attempt to get restated CC&Rs failed to get approved. The existing CC&Rs were recorded in 1998 so they are totally obsolete and do not reflect the current laws. The proposed CC&Rs are in no way harmful to the membership, make many improvements, and most importantly, reflect the current laws. There is really no good reason for members of the association to vote them down other than ignorance. I am concerned and would like your opinion.

I would recommend that you purchase a condominium in another community. The type of community you have described is not a good place to invest your money. There are many condominiums on the market where the membership understands the value of modern CC&Rs.

 

Someone just moved into our condominium association in Los Angeles, with a large pitbull dog. It hasn't attacked anyone, but it is very aggressive and nearly everyone is concerned about it. Our CC&Rs are silent on the subject except for permitting members to own up to two domestic animals. What should we do?

It would have been easier to prevent this problem by amending your CC&Rs before the pitbull was brought onto the property. Attempting to deal with the problem after the fact is much more difficult, but not impossible. The dog may constitute a nuisance which is probably a violation of your CC&Rs. More facts are needed to adequately answer your question. The lesson is clear, however: It is far better to address these types of issues with a CC&R amendment before the anticipated problem becomes a real problem.

 

Our management company recently recorded an assessment lien against the property of a delinquent homeowner. Before recording the lien, they carefully read the CC&Rs and then followed the requirements only to find out afterwards that the CC&Rs were outdated and did not reflect the current law. As a result, we were sued by the delinquent homeowner and forced to pay a large sum of money to settle the case. Can we recover from our management company?

I believe you have a good negligence case. Your management company fell below the standard of care by failing to comply with the current legal requirements. The recordation of liens can have serious consequences and should be supervised by an expert.

The situation you have described clearly illustrates the importance of amending your association's CC&Rs in order to make certain they reflect the current law.

 

Can our homeowner association establish a rule that prohibits smoking in the common area?

In the absence of a provision in your CC&Rs that prohibits such a rule, the answer is yes. Directors of association boards have the right to make rules governing the use of the common area so long as they are legal and not inconsistent with the CC&Rs. Keep in mind that such a rule can be over turned by a subsequent board of directors, and consequently, an amendment to your CC&Rs would make more sense if you want a long-term ban.

 

Can our condominium association amend its CC&Rs to make every condominium owner responsible for interior damage caused by water intrusion?

Yes. However, unit owners may still claim that the association is responsible for such repairs due to negligence.

 

Can our HOA increase the number of directors without restating or amending our association's bylaws?

No. You will be required to amend or restate the bylaws of your HOA. See: Increasing or Decreasing the Number of Directors.

 

I intend to sue my homeowner association for failing to enforce the CC&Rs against another member who has created a serious nuisance. Can I get reimbursed for legal fees?

Probably. The California Civil Code states that in any action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney's fees and costs.

 

Our association board is very concerned about the safety of the children living within our condominium complex. Can we create a rule prohibiting children from skateboarding within the common area?

Such a rule would be considered discriminatory. A rule prohibiting all persons from skateboarding would be enforceable.

 

Can we amend the CC&Rs of our association to prohibit owners from obstructing views of neighboring properties?

Yes. After an attorney drafts an appropriate amendment, the proposed amendment must be approved by a quorum of the membership using the two envelope, secret ballot process. See: Voting to Protect Views in Community Associations.

 

Our association's water bills have dramatically increased over the last few years. Can our community association amend our CC&Rs to prohibit the washing of cars in the common area?

Yes. Your HOA can prohibit members from using the common areas to wash vehicles, boats and trailers. It can also prohibit members from using common area water for such purposes. Since car washes recycle their water, utilizing a car wash saves water and it transfers the cost to the users.

 

We live in a large town home development. My neighbor has been in violation of the CC&Rs for several years. The homeowner association has taken no action and probably will take no action in the future. How long do I have to start an action against my neighbor for violation of the CC&Rs?

You have five years from the time you discovered, or through the exercise of reasonable diligence, should have discovered, the violation. However, your neighbor may have other defenses. Consequently, the matter should be reviewed by an association attorney at the earliest possible time in order to make certain that your rights are not extinguished.

 

My twenty-year-old condominium in Los Angeles is located on a large slope which means that part of my living room is below grade. The wall has been leaking for five years because of poor water proofing. I have complained to the board but they refuse to spend the money for repairs since I am the only owner with this problem. What can I do? I am certain the wall is full of mold. I cannot sell my unit under the circumstances and I have been turned down for a lower interest rate loan because of the problem.

If your CC&Rs are written like most, the HOA is responsible for the repair. There is no reason for you to suffer any longer. Experienced HOA attorneys may represent you on a contingency basis and may advance all or some of the costs required.

 

The board of directors of our homeowner association in Long Beach is permitting members of our association to grow ivy on the exterior stucco of our buildings. The stucco is common area that must be repaired by the association if the ivy damages it. Since I don't want to be responsible to pay for stucco repairs through my association dues in the future, what should I do?

First, point out to your board the specific provisions in your CC&Rs (Covenants, Conditions and Restrictions) that obligate the association to maintain the stucco. Next, point out the fact that the future stucco repairs are only one potential liability being created by permitting the ivy to grow on the stucco. When ivy or other vines cause the water-proofing quality of stucco to be destroyed, moisture can enter the buildings causing substantial interior damage, including but not limited to mold infestation. Some molds are highly toxic resulting in immune system disorders and other serious medical problems. In short, your board is assuming a big and unnecessary risk by allowing ivy or other plant materials to grow on the stucco.

 

What is an annexation of land and how does it work?

An annexation of land takes place when a developer builds a large development in phases. See: Annexation of land.

 

Can the buyer of a condominium unit be held responsible for architectural violations in that unit that existed prior to their acquisition?

Yes. The homeowner association has the right to require the new owner to correct the violation even though he or she did not create the violation. If the seller failed to disclose the existence of the violation, the seller can be held liable for costs/damages, including attorney fees, if a lawsuit is filed against the seller and the buyer proves his or her case. Violations follow the property.

 

What is a Master Community Association and how are they different from standard community associations or homeowner associations?

According to the California Department of Real Estate (DRE), Master Community Associations apply to associations that are 500 or more separate interests. See: Master Community Associations.

 

What is the Uniform Common Interest Ownership Act?

The Uniform Common Interest Ownership Act (UCIOA) is a law that governs the formation, management, and termination of comm n interest developments. It was designed to serve as a model statute that individual states an use to base their own common interest development laws. It was prepared by me Uniform Law Commission in 1982 and was amended in 1994. California does not follow the UCIOA. It utilizes the "Davis-Stirling Common Interest Development Act" also known as the Davis-Stirling Act.